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Follow-up on rich kids beating the career game.

On January 30, I wrote this essay about the advantages held by those from wealthy backgrounds in the supposedly meritocratic career game that determines who among the rising generation will lead. It was posted to Hacker News on March 7, and has attracted a great deal of attention and criticism. I wish to respond to the most thoughtful critiques.

1. Personal gripes, sour grapes, all that jazz.

First, let me handle one of the less thoughtful and interesting (but still marginally relevant) critiques: the claim that my essay is rooted in a personal gripe. To answer that: no, not really. I’m not part of the wealthiest 0.1 percent that can be considered truly elite in this country, but my background is more than comfortable, and my level of talent is sufficient that I’ll probably never be long-term unemployed, at least not in the severe and unfavorable form that unemployment takes for those who are actually poor. All I’m going to say is that I’m closer to the spoiled rich kid with the unfair advantages than the striver with six-figure student loans. To what minimal extent my dislike of American society is rooted in personal issues, it speaks more about my tendency toward anxious worry than about my actual state of affairs. Socioeconomic status is difficult to quantify, involving more than just money, but I’d estimate that I’m from a point between the 95th and 98th percentile in the United States– and, for the record, I still believe that even I would be better off in a fairer system, due to enormous cultural benefits of a more just society. That’s all I care to say about where I come from; it’s really not that relevant.

This post probably began in my mind when I read an article (ca. 2006) about the fortunes of Ph.D. students of differing backgrounds. For those who entered academia, the correlation between background and pay was minimal, but for those who went into industry, those from wealthy backgrounds invariably ended up at the top. (Since we’re talking about people with doctorate degrees, we’ve already eliminated degenerate party-animal rich kids from the discussion.) This I found perverse: one would hope that, out of the pool of people hard-working and talented enough to get quantitative doctorates, any socioeconomic influence would be eliminated. Not so. Honestly, I didn’t believe the conclusions of the article, until I observed the experiences of my friends in various corners of the working world.

In large-firm law (“biglaw”) one’s chances at partnership are determined not by the quality of one’s work, one’s law school grades, or even the prestige of one’s law school, but by the prestige of one’s undergraduate college and, far more so, the status of one’s prep school. (As “too many” smart middle-class students have been allowed into elite colleges these days, ever since that “Jewish-Marxist conspiracy” known as the SAT, the upper class is now using prep school to size people up.)

The closest I’ve been, personally, to this matter is when I observed the ignominious firing of a friend of mine. Though I didn’t work with him at the time, we share enough of a social circle to make it clear what happened. As he was from a middle-class background at a predominantly upper-middle- to upper-class hedge fund, he was placed at the bottom of the heap in terms of project allocation, getting assigned the work that no one else wanted to do, because of where he came from and the assumption that he had no better options. When this pattern reached beyond disfavor into managerial fuckup territory (a project he suggested was ignored, then given to someone less qualified a year later) he asked his boss for an explanation. At the next performance review, he was fired: people like him don’t get to speak up about project allocation.

Realizing with age that this sort of injustice is systemic, and that a number of people had experiences just like his, has led me to believe that the overthrow of the corporate system is necessary and good.

2. Anti-corporatism is not anti-capitalism

As a libertarian socialist, I believe that government should provide a basic income (of about half the per-capita GDP) and safety net in order to eliminate poverty. I would argue that the basic income should be provided to all people, so that a person’s income is a monotonic function of wages earned. (That is, there isn’t the “welfare valley” in which a person’s income drops when going from welfare to entry-level work.) In the United States, conservatives believe that poverty is a “bitter medicine” that impels people toward more moral behavior. They’re wrong. Poverty is a cancer that eats a society from the inside out. That said, I believe that once a basic income is established and being jobless is no longer the life-crushing horror is is now, government can step out of the way on many issues. There’s no need for a minimum wage, for example, when basic income is already provided. (In truth, the minimum wage is just an extremely clumsy and minimal basic income, but with the burden of payment placed on low-end employers, the result being that they’re discouraged from hiring at the low end at all, creating excess unemployment.)

In a libertarian socialist system, the right of free enterprise is recognized as long as it does not impinge on others’ rights, including a fair society and a clean environment. Now that being fired is an inconvenience but not a disaster, companies can be allowed to hire and fire at will. There’s a floor on economic well-being but no ceiling, as I honestly can’t see a good reason why the genuinely most productive people shouldn’t be given huge rewards. What I don’t like is seeing a class of generally untalented and ineffectual people given huge rewards just because of where they were born, and I especially don’t like the fact that these enormous rewards enable their arrogance and lead them to destroy everything, as we observed in the financial meltdown of 2008.

I believe in maximizing freedom, and economic freedom (the freedom from poverty and corporate authority, but also the right of free enterprise) is critically important. Work needs to get done, but peoples’ intrinsic desires to work (noting that there will still be a free labor market) will take care of that. The strongest argument against a welfare state hinges on the observation that some people (maybe 10 to 20 percent) have no drive to work, and that a welfare state establishes a permanent class of well-fed, lazy, parasitic people at the bottom of society. The obvious counterpoint is the observed and indisputable fact that corporate capitalism creates a permanent class of lazy, useless, and parasitic people at the top of society, and that’s far more unhealthy.

Corporate capitalism, which I desire to destroy, is neither capitalism nor socialism. Rather, it’s a system designed to provide the best of both systems for a small elite (about 0.5%) while leaving the worst of both worlds for the rest.

What does this have to do with rich kids in the workplace? My contention is that the advantage held by the rich is largely a consequence of their ability to live freely. They own, rather than renting, their lives. This gives them a sense of place and purpose that energizes them, enabling them to make work both a productive and fulfilling experience, rather than a burden that will sap their energy, for someone else’s benefit, until they are too old to be useful. My desire, with regard to libertarian socialism, is to make this freedom as common as water. I don’t wish to end work, but to liberate it. Imagine the world we’d have if people worked on what they wanted to work on instead of what they had to do to get by: people would have a lot more passion and creative energy. (As for the “grunt jobs”, they’d still be done as people would pay others to do them, but the conditions the workers faced would be ones of respect and appreciation for their time, rather than exploitation.)

3. Not all rich kids succeed– still not a counterexample.

A counterargument I often hear to the point I’ve made here is that a lot of rich kids are shiftless, indolent, or socially ungraceful and therefore do not succeed in any kind of workplace environment. This is, obviously, true. Dumb and lazy rich kids end up with embarrassing, depressing, and rather pointless lives just like pretty much everyone else. I’m not talking about the dumb and lazy people; I have nothing against them, but I don’t really care about them either. I’m talking about the hard-working, talented people who should be (whether they come from rich or poor backgrounds) the next generation’s leaders. If they are rich, it is impossible for them not to be drawn into the ruling class even if their work ethic is just average; if they are poor or middle-class, it’s highly unlikely.

Rich kids know that they have a near-100% chance of getting appropriate recognition. They don’t even need to play office politics; those details “work themselves out”. If they take demanding jobs, their work ethic is never questioned because it’s known that they could choose less demanding jobs. Even though the rich are almost never given higher salaries or shorter hours than their middle-class counterparts, but they almost always get the best projects . A very wealthy friend of mine who entered investment banking explained it this way: he still had to work 90-hour weeks, and wasn’t paid more than any other analyst, but the projects he got were often VP-level in quality, and Managing Directors took an active interest in whether he felt he was getting appropriate work.

4. “Just go start a business”

Paul Fussell wrote a book called Class in which he insightfully eviscerated every social class, and his finishing chapter, “The X Way Out”, described a “Category X” of people whose intelligence and culture enabled them, whether poor or rich or (as most of them were) upper-middle-class, to transcend social class and live “outside of the system”. This highly-regarded set of people was the namesake for “Generation X”. Everyone wants to believe they’re part of category X, but few people actually are. “X” is great, but until we eradicate poverty and economic exigency as if they were a plague, it won’t be the reality for most of the world.

The “start a business” advice is analogous to “become category X”. I’m not against startups. Startups are awesome. When we do implement libertarian socialism, we need to make ourselves absolutely sure that we have a society in which new businesses can flourish, because they are where innovation comes from. To argue, however, that startups are a silver bullet to the world’s class problems is painfully naive. First, only a small percentage of the population can afford to work for an extended period of time for no or low salary, with no guarantee of an eventual payoff and, in fact, a high failure rate. Second, fundraising and public relations are all about connections. It’s almost certainly easier to start a business from the grass roots in 2011 than it was in 1975, but startups remain a game that only the privileged can play. Rent and food, well-off people like myself often forget, do not magically materialize when needed.

The venture capital angle probably deserves its own post. Raising money, even for the best startups, is an execrable fucking nightmare. Often three-person startups will have one person working full-time on the fundraising game, because it really is a full-time job. It’s not something that takes care of itself like in the Hollywood portrayal of startup life. It’s rare that a startup can get decent terms from a venture capitalist without creating simultaneous interest in a large number of investors at once– call it the “herd mentality” if in a pejorative mood. Business is all about leverage, and even a great startup may face terms like participating preferred and multiple liquidation preferences (if the words “multiple liquidation preferences” didn’t evoke nausea, hatred, and a visceral desire to stab someone, they should) if a venture capitalist thinks that, despite its merits or potential, no other VC will fund it. How, exactly, is a young entrepreneur going to create simultaneous interest without deep social connections into the venture capital world? He can’t.

The best strategy for an aspiring entrepreneur would be to work as a leading venture capitalist’s protege out of school, being placed in portfolio companies (preferably in technical, rather than managerial, roles, especially early on) while maintaining the VC relationship, and then to found companies once experienced and well-connected. This career, however, is only available to the very rich.

5. Exceptions don’t prove the rule, but they are exceptions.

Exceptions to my claims exist. Mark Zuckerberg came from a “merely” upper-middle-class background, went to Harvard but did not fit in with final-club brats, and nonetheless managed to put his cool project in front of the Harvard Crimson. His luck was enormous at times, but he succeeded on his own merits and built a successful company, though not a true “rich kid”. Fair. It, of course, does happen on occasion. And knock-out successes are more likely to come from the fringes of the elite (Gates, Jobs, Zuckerberg) than the elite’s risk-averse, social-climbing, conservative core. No question there. I am not going to claim that such exceptions “prove the rule” because that would be nonsense; an exception is cause to doubt a rule, not proof of it. I will claim that they are outliers; I think this much is obvious.

People love to talk about social mobility. We have a little bit of that in the United States, but it’s more like a social Brownian motion. People drift a little bit from where they start, creating a pattern of mobility (up, down, or up-and-down) across generations that is often mostly out of their control. Once every 100,000 years or so per person– which means it’s guaranteed to happen for some, given the gigantic number of people in this society– there’s a sudden jump in the upward (or downward) direction, landing in great wealth. It doesn’t never happen. It is, however, quite rare, and I wouldn’t bet my life on it, which is what corporate denizens (sacrificing their quality of life now, for the promise of enormous wealth in the future) are literally doing.

6. Solutions to this problem exist, but only radical ones.

The injustice I have described is nowhere close to being the most severe crime of corporate capitalism. I doubt it even cracks the top 10. Compared to American health insurance, which is a 9/11 every 24 days and therefore just cause for aggressive retribution, it’s almost too minor an injustice to even mention it. The American middle class are, by world standards, privileged people and the fact that they will get less than they deserve, while still living in moderate comfort, may not garner much sympathy. Still, it’s critically important to raise this issue, because so little attention is given to it that even many intelligent people buy into the delusion that an American “meritocracy” exists.

The American middle class, despite its comfort, is bitter and anxious, yet deeply desirous of change. They will, for better or worse, play a major role in the ongoing worldwide revolution against the tyrants of the dark ages, from whose dominion we are struggling to emerge. The Great Lie that the corporate elite has put out– that corporate capitalism is a meritocracy and that it’s possible for people of talent and conscience can “work within the system”, rise to power, and rule justly– has led people to accept a morally unacceptable status quo.

There are two reforms the immediate future will require of us. The first involves energy: we’ll need to move away from fossil fuels due both to declining resources and environmental concerns. The second revolves around work. We have to fix Work. As technological advances render human labor less necessary, the age in which average people can reliably sell labor to markets at a fair price is going to end. Don’t look for it to come back. It never will. One year of unpaid education is already required to secure two years of paid work, and that ratio is only going to get steeper as technology advances and what decent work remains becomes more specialized. The bounty brought into society by the next 100 years of technical advances will be immense, but if the gains aren’t distributed fairly, a lot of people will be very miserable.

In the mid-1920s, improvements in agricultural technology, especially in the Midwestern United States, brought commodity prices to low levels and triggered a spell of rural poverty. It might have seemed like a problem “out there” to a Manhattanite in 1928, but two years later the poverty had spread far enough to tank the stock market and seep into the cities. By 1933, even many wealthy people faced utter ruin the Depression. As I’ve argued, poverty is not “moral medicine” but a cancer that destroys society. Six years of the most horrendous and idiotic activity humanity has ever conceived– war– transpired before the Depression ended.

What happened to agricultural commodities in the 1920s is about to happen to nearly all human labor. If we fail to graduate, now, to a rational society, the calamity awaiting us is far greater.

On the other hand, if we seize the opportunity to build a rational and fair society, judiciously but aggressively clearing away cruft, legacy and inheritance in favor of something better, we can eradicate many of the problems I’ve exposed in the last few thousand words.

I get what you are saying. I work in the government sector.
I notice fellow well off workers tend to group together to discuss
work details, leaving out the uninvited.
Wealthy people tend to be better looking, better nutrition,
better clothes. I believe that’s why competing for a job opening
the wealthier person would get the job.
The only “solution” would be for the less wealthy person is
to stay with the basics (learn how to interview for a new job, stay
up to date on education, be ready to go interviewing for a job).
Truth be told, don’t the rich people still need people to do the
dirty work?

Before I begin, thank you for getting these ideas out into the public. I have been saying much of the same, in a much less eloquent way, for MANY years now, to the result of much mocking and being called a socialist that should move to Europe and be done with it all.

@john Wong, keeping up with the basics won’t be enough for jobs requiring future, labor market, skill-sets. The poor and even the middle class (not the upper middle class) will simply NOT be able to keep up with the skill demands for employment, while earning wages AND keeping a roof over their heads. In the future these very high costs skills needed to stay “relevant” will only be affordable to the rich, or VERY far forward thinking middle class families, willing to sacrifice everything financially to keep their offspring competitive in the larger job market.

I will begin with the usual assertion I hear in regards to the impact of these soon to be real “future-tech jobs”,

“Someone has to get paid to fix the robots!”

I hear this a lot as a rebuttal to mass automation in the workplace bent on replacing living workers with machines, BUT it misses a subtle point that ONLY the children of the wealthy will have the opportunity to become TRUE experts in this field. Let me clarify, through the prior 20th century, a poor kid who studied hard could become a lawyer, accountant, even a doctor sometimes with the right combination of hard work, savings, scholarships, family support, etc. HOWEVER, in engineering university curriculum’s times are changing to favor kids who have access to expensive software and hardware to “experiment” with and “practice” on before entering college AND when they finally get to college, those whom have had lots of free time to “play” with robotics and programming outside of class WILL CERTAINLY outpace their less privileged peer who flips burgers part-time to pay rent and school expenses.

Many people generally do not bother to ask themselves, would future robotics consulting companies prefer to hire low work experienced graduates, whom have demonstrated HANDS ON, non-professional robotics experience in the form of a “hobby portfolio” OR graduate with no “hobby portfolio” experience, whom worked hard to graduate with a difficult major, but didn’t have as much free time to develop skills specifically related to their major and have a long list of totally job experience, flipping burgers, unrelated to their major? I’m seeing this already happening in many different engineering fields where the young workers being hired today are from wealthy families and great colleges, while at the same time being trained by older folks whom were necessarily not as privileged in their youth, but got through school the hard, 20th century way and were trained on the job, with paid over long periods of time. Which certainly is no longer an option in 2014 and on because companies would prefer to churn experienced staff rather than train fresh graduates in-house.

In the link below this paragraph I have posted an example of what I believe to be a young person from a well off family who majored in robotics at USC, whom doesn’t appear to have had an unrelated part-time job to her major, while in college, possibly had lots time to “experiment” with the technology in her spare time, got a masters degree back to back to the bachelors AND at the end of the day got a job offer at a University sponsored dinner party for robotics majors. NOBODY I went to college with EVER got a job offer at a university sponsored dinner party, I’m sure many Ivy league graduate do however.. My point being, these future “robot repair jobs” are going to require smart kids with desire to advance, that went to good schools, had lots of spare time and money to play with the tech outside of school AND got their jobs offered at dinner parties, some of which will be non-paying internships at first. These jobs will not be gotten through sending out blind jobs applications or web job boards, as was done in the 20th century. Basically what this girl is doing for Disney will in the near future be more like what a plumber or electrician of today does, EXCEPT you won’t get trained on the job in a low-pay apprenticeship when at “entry level”. In fact to even be considered for these “future-tech jobs” in the first place you’ll need to have good academic pedigree, lots of unpaid hobby time and 1+ years unpaid internships.

Those whom are going to be rendered jobless by automation/robotics/tech are going to be the least likely to be able to pick up these pieces in the post-tech, coming era of traditional jobs destruction. Its going to IMPOSSIBLE for the poor to go back to school, get a masters degree in robotics, in full-time only engineering programs, that strongly discourage their admitted students from taking part-time jobs, while favoring students who have both the money and free time, don’t EVER work at an unrelated job to their majors, who then buy expensive robotics hardware/software to experiment with outside of class.

Mark my words this future labor in the pursuit of “maintaining robots” is going to be the sole domain of rich kids with advanced degrees from good schools because NO ONE is going to train anyone else perceived as lesser in that kind of job, WITH PAY.

Robotics and AI are essentially the same lie that was made when desktop computers in the workplace were supposed to reduce total work hours per week, now rehashed for a 21st century audience.

I think its funny when regular people get excited about future tech jobs, concepts like the Singularity, lean Automation, advanced Robitics, etc. Do people really think when these thing finally become real, functioning, working designs & products, applicable to commercial industry, that the “peons” will all get a “Data from Start Trek” or a “C-3PO from Star Wars” to help out at home, at the job site or in the office?

In reality we are going to get a David 8 from Prometheus/Aliens or the Robot Probation officer seen in Elysium. They are going to take away jobs and make unethical policing/enforcing both easier and cheaper for corporations and government. Companies and government agencies won’t be paying a salary to the robot worker, so the savings can be funneled into legal fees for wrongdoing and general AI mayhem, simultaneously resulting in an overall savings for the corporation/government and an overall loss of liberty for everyone else having to prove the culpable parties of wrong-doing in a court of court.

Who do you sue or goes to jail when a robot pulls your arm out of the socket, at work or policing citizens? Will it be considered “negligence by the human” that got their arm pulled out, etc, in court? I personally at this point are willing to live with 1980’s +/- era tech, if it means I am more free overall, can earn money to live on and put a roof over my head.

To continue my above point, I believe “rich kid” job mobility is going to be a bigger problem for regular folks beyond what their pedigree typically brings to them, but rather that their access to endless money and time to “explore” academics and hands-on work with no consequences is going to END job mobility of any kind for the lower and middle classes, even those whom have met the required higher education and work experience standards.

Up to the 1940 a person could get just about any job with an 8th grade education, but today you need a BA or Masters for entry level.

Why?

Because the government figured out a long time ago that populations would certainly increase over time, but due to technology advancements, the availability of jobs would not expand to meet that population growth. There is a reason they don’t want people dropping out of high school and then encouraging that high school graduate to attend junior college, then a 4 year university and finally a Masters degree or PhD because it DECREASES the amount of people looking for full-time employment at the SAME TIME, chasing after jobs in a market that CANNOT provide employment for everyone looking and willing to work.

Look at it this way, when people could get a job with an 8th grade education they went out and did it as soon as possible (opportunity cost). Then jobs got scarcer and the minimum became a high school diploma, adding 4 more years of people NOT Looking for jobs within their cohort. Then jobs got even scarcer and the minimum became a 2 or 4 year college degree, adding an additional 2-4 years of people NOT looking for jobs within their cohort. Now jobs are really scarce and may require a Masters or PHD, adding an additional 2-7 years of people NOT looking for jobs within their cohort.

Basically the way the economy has been structured TODAY, we are looking at young people within their cohort whom are NOT looking for full-time, career type, employment for 6-15 YEARS while they finish school!!!

This has been done ON PURPOSE to keep the number people seeking employment lower. In 1920 after 8th grade everyone who was able went out to look for work and typically found it, that’s simply NOT possible today under any circumstances. Easily accessed welfare will add another 1-3 years of people within a cohort to those “not seeking employment”, not to the specific detriment of society, but to continue to mask the illusion that jobs and upward mobility are available. So, if someone gets a graduate degree and collects 1-3 years of welfare of some kind that’s ONE less person competing for scarce jobs. The extra years of welfare then are acting in the same way to the larger economy as the increased minimum education levels for employment. Essentially to decrease the number of able-bodied applicants out on the job market at the same time. This cohort of people not pursuing full-time employment also includes those in Prison, Government pensioners and the disabled on government assistance. If everyone needed to go out and “get a job” or “start their own business” as many “capitalists” suggest these days, we would all be making 0.25 cents a day.

Guess when the largest “recorded” wage increase happened in history for, non-land owing, wage-laborers, post the introduction of fiat currency?

Any ideas?

I’ll tell you, it was after the black death pandemic in the 14th century.

How is that possible?

Because “the owners of capital”, post-black-death-pandemic still needed wage-laborers, but there was a HUGE shortage of able bodied people, so in order for ANY work to get done they had to pay the peasants and other undesirables more, SIGNIFICANTLY MORE. This principle is still at work today, when you take the time to recognize that portions of the population are actively discouraged from participating in the full-time labor market. This is easily done, by throwing people in prison, forcing them to attend formal school longer and allowing more people to claim themselves as disabled or collect both long and short term welfare. The next obvious step for government to further reduce the number of people participating in the full-time labor market is to allow them easier access to welfare or as michaelochurch points out a guaranteed minimum wage or allowance that everyone gets without having to provide labor to an employer. I’m not going to go into any specific economic theory, but this above noted cohort of non-participants collecting a base amount of guaranteed welfare/allowance will keep wages stable for those whom are working full-time. If all people capable of working full-time entered the jobs the market simultaneously, wages would crash and to a certain extent have, as of 2014.

There has ALWAYS been an economic system at work in the USA that limited the number of able bodied workers whom would be PAID and those who WOULD NOT be paid. The “owners of capital” learned their lesson about labor shortages POST the “Black Death” and figured out from that day forward how to keep wages down and potential available laborers numbers at maximum levels, while forcing them to compete for scarce available positions.

In the past when there wasn’t enough money to go around to pay wages the “owners of capital” simply brought in more indentured servant immigrants (Irish, Italians, Chinese, etc) or used flat out slave labor (Blacks, Native Americans, domestic prisoners, POW’s, etc). The only difference between now and then is that “owners of capital” can’t LEGALLY have slaves or indentured servants anymore, BUT they have the same pressures as before, to keep their high wages flowing and laborers working even when there isn’t enough “PIE” to go around to pay those laborers for services rendered. The mechanisms today that replaces slaves and indentured servants are the following: longer than needed formal education for basic employment, off-shoring of labor, forced retirement, prisoners and welfare.

The only other choice when these conditions eventually arise will be the expansion of welfare because rich kids will want to work for fun or enrichment, but there won’t be many job to go around anyway. So, someone has to go and it won’t be them at the end of the day.